Today, Representative Cory Gardner (CO-04) voted for a third time to let House Republicans leave Washington for their holiday vacation without voting to extend the $1,000 payroll tax for 2.5 million Colorado families. Gardner has protected tax breaks for the ultra wealthy but failed to protect middle income families for this payroll tax increase at the end of the year.

“It’s a sure thing Representative Cory Gardner will protect tax breaks for billionaires but when it comes to protecting middle income Colorado families from this $1,000 tax hike he can’t be bothered to stay in Washington to get it done,” said Jesse Ferguson of the Democratic Congressional Campaign Committee. “Gardner had another chance to make sure to stop this $1,000 middle income tax increase but he voted to leave for his holiday vacation while leaving middle income families with this lump of coal.”

Independent economists have found that increasing the payroll tax could cost nearly 1 million American jobs and trigger another recession. The non-partisan Congressional Budget Office found that extending the payroll tax cut is more cost effective to promote economic growth and employment than more tax breaks for the ultra wealthy that Gardner has supported.

Background

Today, Representative Cory Gardner voted against guaranteeing extending payroll tax relief. House Republicans, including Gardner, voted to bypass consideration of guaranteeing the extension of the payroll tax holiday beyond 2011. Without extension, payroll tax relief will expire at the end of the year. [H Res 487, Vote #902, 12/8/11]

Last week, Representative Cory Gardner voted against guaranteeing extending payroll tax relief. [H Res 477, Vote #870, 11/30/11]Tax Increase for 2.5 Million Colorado families. In Colorado, failing to pass the payroll tax cut would mean 2.5 million families would face an average of $1,000 tax increase. In 2010, a two percent point payroll tax cut was signed into law, providing an estimated $108.6 billion in tax relief to roughly 159 million workers. If Congress fails to extend this tax break, it will cost the typical American working family $1,000 per year. [Office of Tax Policy – Treasury Department, 11/30/11]

Trigger Another Recession. According to Mark Zandi, chief economist at Moody’s Analytics and former advisor to John McCain’s 2008 campaign for President, failing to extend a payroll tax break into 2012 could trigger another recession. [Moody’s Analytics, 9/9/11; Reuters, 10/6/11]

Cost Nearly 1 Million Jobs. According to the Economic Policy Institute, “The loss of the payroll tax holiday, a tax cut that reduces Social Security payroll tax for all workers, would lead to a reduction in GDP of $128 billion and roughly 972,000 fewer jobs in 2012.” [Economic Policy Institute, 8/5/11]

More Effective Than Tax Breaks for the Rich. According to the non-partisan Congressional Budget Office (CBO), it is more cost effective to promote economic growth and increase employment through reducing employees’ payroll taxes than policies that more greatly benefit those with relatively high incomes, such as the Bush tax cuts and an Alternative Minimum Tax (AMT) patch. The CBO estimated that reducing employees’ payroll taxes would raise GDP by $0.30 to $0.90 between 2010 and 2015 per every dollar spent, but a two-year AMT patch and one-year deferral of Bush tax cuts would only raise output by $0.10 to $0.40 for every dollar spent. [Congressional Budget Office, 1/10]